Private Investors rush to buy Northern Rock shares

Yesterday 38 per cent of the trades put through Hoodless Brennan were execution-only clients trading in Northern Rock, rather than clients receiving advice from Hoodless Brennan brokers. Normally even with a big rise or fall, any one stock would be at most two or three per cent of the company’s daily volume so this is an extraordinary amount. Of that 38 per cent, more than 85 per cent are buying Northern Rock not selling.

It seems these investors think the bank’s shares have been oversold and will rise in the short-term, especially if a takeover occurs. People are even opening new share trading accounts just to buy Northern Rock and Hoodless Brennan, which is the UK’s best value online share dealing broker*,  has seen a 300 per cent rise in new accounts since Friday as a result.

This is all in sharp contrast to the worries of investors with money in Northern Rock bank accounts. Despite appeals for calm from Northern Rock and the Treasury almost £2bn has been withdrawn from the bank since Thursday and its share price has fallen by 40 per cent since it applied to the Bank of England for emergency funds.

Mark Rayden is Product Development Manager of Hoodless Brennan. He says:

“We are seeing unprecedented numbers of people opening share trading accounts with us to buy Northern Rock. Over the weekend we saw a 300 per cent increase in accounts opened and 76 per cent of Northern Rock trades on Monday were buying not selling. It would seem that investors are looking to make a quick profit by buying shares in the bank and expecting to see a recovery.”

If you would like any more information about the trading activity which Hoodless Brennan has seen regarding Northern Rock, or to speak to Mark Rayden from Hoodless Brennan please let me know.

 *www.moneysupermarket.com 18 September 2007